India’s Wealthy Must Open Their Gates and Fight Chaos

By Ravi Venkatesan -
Oct 2, 2013

Lately India has been in the news for
all the wrong reasons. Its once tigerish economy is growing at
its slowest rate in more than a decade. Newspapers are filled
with ever more depressing stories of rape, official plunder and
gut-wrenching poverty. To an outsider the headlines can seem
surreal: Last week the cabinet actually voted to allow convicted
criminals to serve in Parliament and state legislatures, before
being forced to back down.

Indians -- who know that almost a third of the members of
the lower house of Parliament face criminal charges -- can be
jaded about such things. But this kind of official brazenness
can hardly inspire confidence in companies looking to invest in
India, which has long touted the rule of law as its one crucial
advantage over China.

And what about affluent Indians, who unlike foreign
companies have a big stake in their country and society? Can
they really continue to ignore the chaos and dysfunction that
surrounds them, the broken infrastructure and equally threadbare
laws? Can they thrive indefinitely in a country where most
people exist on less than $2 a day, where half the homes lack
toilets and three-quarters of the population doesn’t have access
to safe drinking water?

Broken Country

There is no question that India has great potential. Having
built successful operations for more than one multinational in
my homeland, I know it’s quite possible to navigate India’s
chaos and build profitable businesses here. Indeed chaos --
which is really shorthand for corruption, poor governance,
uncertainty and volatility -- is a defining feature not just of
India but also of many emerging markets. Global companies that
learn to conquer it here will be well-prepared to succeed
elsewhere.

But without a semblance of governance and the rule of law,
India’s rise is hardly inevitable. Demographics and talent --
the lodestones of India advocates -- don’t automatically
outweigh criminality, corruption and self-interest.

The culprits for this mess seem obvious: greedy
politicians, corrupt bureaucrats and the greasy oligarchs who
flatter and fund them. Many middle-class Indians blame democracy
itself, which gives the vote to the unwashed and easily bought
masses. Increasingly, though, I wonder if the problem isn’t us:
educated, relatively wealthy, urban Indians.

Millions of creative and resilient citizens have done well
by finding ways around India’s chaos rather than challenging it.
We send our children to private schools and abroad rather than
to government schools. We patronize world-class private
hospitals instead of the public health-care system. We live
behind the walls of gated communities, supplied by individual
wells and powered by diesel generators.

Indeed, we take pride in our ability to succeed despite the
government. The less influence the state has in our lives, the
better: We don’t vote (turnout in elite areas is 35 percent or
less) or pay taxes (less than 3 percent of Indians actually do).
We shudder at the thought of entering government or politics.

Our disengagement has made the erosion of India’s public
institutions possible. Now the fragile layer of insulation we’ve
wrapped around ourselves is also eroding. Even the affluent and
influential can no longer escape the extortion and lawlessness
that the less lucky have always faced. I’ve been trying to build
a house in Bangalore for more than two years, and have been
stymied at every turn by rapacious demands for bribes. One
friend’s home has been illegally occupied by a real-estate
developer with political connections; the legal process to evict
him has stalled because the judge hasn’t showed up for a year.

‘Banana Republic’

Another colleague, one of India’s most respected and
influential industrialists, has had to move out of his home in
Pune because an illegal mall sprouted a few feet outside his
door. The state itself has turned predator. “Bribery and
nepotism -- that’s what it now takes to succeed,” laments
Narayana Murthy of Infosys, one of India’s most respected
corporate leaders. “There is every possibility that India could
slide down the path of becoming a banana republic,” legendary
industrialist Ratan Tata has warned.

Let us be blunt: India’s rise is not inevitable. As with
companies, success isn’t just about potential. It is about
performance. Performance requires good governance, strong
institutions and, most of all, the rule of law. When politics
degenerates into family enterprises designed to plunder the
country with the help of obliging businessmen and bureaucrats,
when self-interest trumps national interest, sensible policies
will always lose out to the lure of graft and loot.

These problems will not fix themselves. Even now many urban
Indians are hoping for the emergence of a benevolent strongman
in Delhi, perhaps the opposition Bharatiya Janata Party’s
Narendra Modi. Even if Modi is the strong leader he tries to
portray, however, this is wishful thinking. The only way the
situation is going to change is if middle-class Indians -- those
of us with education, money and a real stake in society -- work
to change it.

We have to reclaim our country. That means becoming
responsible and truly engaged citizens for the first time. We
have to start following the law even when there are few
consequences for breaking it. We have to vote in elections and
pay taxes instead of bribes. We have to get out on the streets
to protest publicly and vigorously against injustices -- not
just once, when some horrible scandal moves us, but
consistently. We have to donate money and our time to strengthen
NGOs and volunteer organizations.

Ultimately we have to have the courage to join the civil
service and to run for office. Unless honest and patriotic
leaders replace the cynics and crooks, efforts to change the
system will never gain sufficient momentum.

It’s no longer appropriate for Indians to ignore the chaos
around them the way a multinational might. We can’t just wall
ourselves off, emigrate or send our money and kids abroad. Our
disengagement is producing a dysfunctional and unlivable
society. If we don’t conquer the chaos, chaos will conquer
India.

(Ravi Venkatesan, the former chairman of Microsoft India,
is the author of “Conquering the Chaos: Win in India, Win
Everywhere.”)

To contact the writer of this article:
Ravi Venkatesan at ravi_venkatesan@hotmail.com.